Intel’s dilemma: Whose problem do Ultrabooks solve?

If one could earn an “A” for effort, I’d have to award it to Intel. The company’s CES press event on Monday morning was an outstanding and entertaining presentation. Ultrabooks were the focus, but even as I left the 45-minute event, I felt there was plenty of sizzle and not enough steak.

Mooly Eden, the Intel VP and general manager of the PC Client Group, was a one-man show, not only touting the many successes of Intel’s Sandy Bridge computing platform — 150 million such chips sold — but also demonstrating the latest Ultrabook technology. These small notebooks, around 18 millimeters thin (or less) offer what people want, according to Intel: great experiences in a small package.

Eden took a small jab at the tablet market where Apple’s iPad has the lion’s share of the market, and Intel is barely in the game. He mentioned that content consumption isn’t enough for these devices. “Consumption is good for cows. We are humans,” Eden said as he launched a demonstration of ArcSoft software for photo album creation. On the surface, the demo was about the Ultrabook experience, but you didn’t have to look deep for the traditional Intel message of speed and power.

Ultimately, the problem that keeps coming back to me is that Intel’s focus is on experiences already met by non-Intel devices. For example, the six main “experiences” Intel says Ultrabooks deliver are: Creation to Express; Not Needing to Wait; Unwired; Peace of Mind; Reflection of Me; and At a Price That Works.

I’d argue smartphones and tablets currently meet most, if not all of those needs; therein lies the problem for Ultrabooks. It’s not a consumer problem; it’s an Intel problem, as sales of traditional computers are declining, while sales of tablets and smartphones are rising.

Short of being powerful, portable laptops, there’s no new “experience” to be had here. Intel is even challenged on the final of its six target experiences, because it knows these devices need to come down in price. Eden suggested that when the partner ecosystem reaches economies of scale, Ultrabook prices would come down to mainstream price points. With 75 expected Ultrabook models due out this year, I hope those prices drop quickly.

Even as the current crop of Ultrabooks arrives though, Intel is looking ahead. So what’s the future for Ultrabooks? Thanks to the Ivy Bridge chip power, look for gesture-based computing, interaction between devices, and better voice recognition with help from Nuance. Impressive as these were, they aren’t new ideas, and for now, they’re concepts for Intel.

Speaking of old ideas, Eden was excited about Ultrabooks with touch displays. Haven’t we seen these for several years? They haven’t sold before in mass numbers, and they’re unlikely to sell again for two reasons. The ergonomics of such “reach out and touch” activities makes no sense for most standard computing activities, and this technology will add a price premium that will reduce demand.

Still, one concept really captured my attention. Intel showed off an Ultrabook that has a transparent area where the trackpad would normally reside on a laptop. It’s touch sensitive, so it can be used as a giant trackpad, but it has palm-rejection so as not to interfere with typing. Most impressive, however, was that the see-through area can show information when the laptop is closed.

Aside from displaying appointments, emails and such, a user could interact with this data without opening the laptop. I think this is clever, but it also says something about Intel’s lack of ability to enter the smartphone market. Why? Because the company is trying to move traditional smartphone activities — email, notifications, calendar events — to the laptop. Eden even said this was “so you don’t have to pull a smartphone out of your pocket.”

Even with that unique, forward-thinking demonstration, however, it still seems to me like Intel is trying too hard to invent something that’s just the natural evolution of laptops. In turn, its branding of Ultrabooks is more about solving Intel’s problem — less reliance on it as devices embrace ARM chips — than solving a consumer problem.